The export decline

The economy of ECAFE countries except mainland China has largely been dominated in the last few years by very sharp fluctuations in commodity prices, affecting not only export earnings, but also the level of government revenue and the whole tempo of economic activity. High prices in the early period of the Korean war boom made possible substantial increases in consumption levels as well as the launching of a great many development projects, but in the period of price decline retrenchment became necessary. The impact of the price fluctuations was not confined to those countries in which exports account for a substantial proportion of national income; in India exports are small in relation to national income, yet inflationary pressures arose from the commodity boom, and sharp price declines followed. In the case of Japan, which is a large-scale importer of primary products and exporter of manufactures, the impact of the Korean war boom nevertheless resulted in a great rise in exports and an improvement in the terms of trade. While Japan had not suffered, as other countries did, from a sharp deterioration in the terms of trade in the subsequent period, it had nevertheless experienced declines in export prices comparable to those of other countries. In fact it appears that, apart from mainland China, only the Philippines has not shown the general pattern of events, largely because of the counteracting effect of the United States Government expenditure.

Sustainable Development Goals:

Decent Work and Economic Growth

Reduced Inequalities